Gold News

LBMA 2018 Boston: Right on Gold Price at Last?

Premier gold industry conference badly wrong a year ago...

WILL the gold industry never learn? asks Adrian Ash at BullionVault.

This weekend kicks off the London Bullion Market Association's 2018 conference, held this year in Boston, Massachusetts.

LBMA Boston will be the 6th such event in a row to find gold trading below a $1300 handle.
 
Yet in 3 of the last 5 years, delegates have – when polled on the second and last day of the LBMA conference – forecast that gold will trade above that level by the time of the following year's October event.
 
In Barcelona last year they doubled down, forecasting $1369 by today even after missing October 2017's gold price by $85 per ounce with a call for $1347 gold at LBMA 2016 in Singapore.
 
Chart of LBMA conference gold-price forecasts, 2008-2018. Source: BullionVault
 
If anyone is trying to build a business on such bullishness, their inevitable bankruptcy hasn't yet dented attendance at the LBMA's annual conference so far.
 
Another 700-odd delegates are making their way to Massachusetts this year, matching if not beating the record numbers at Barcelona 2017.
 
Most of those refiners, bankers, vaults, insurers and dealers were too busy doing business to attend all the formal conference sessions. So it was those left in the room who forecast gold prices rising 6.6% above that day's afternoon London benchmark of $1284.75 – a forecast that has now missed today's outcome by more than 10%.
 
Away from last year's half-empty conference room however, LBMA Barcelona was more muted on gold. Stock markets were too strong, and rising rates wouldn't help, said pretty much everyone over coffee, beer or dinner.
 
What if that changed, as it has over the last 3 weeks?
 
For us here at BullionVault, this month has marked a clear break with 2018's pattern of bargain-hunting and then profit-taking among private investors in gold. Because even as prices have risen, net demand on BullionVault has risen 126% from its previous 12-month average, totalling a quarter-of-a-tonne (224kg) and taking client holdings to a new record above 39 tonnes.
 
We haven't seen such a positive response to a strong rise in gold prices since Trump's election followed the UK's Brexit referendum shock in 2016.
 
What changed? In a word, equities, because the stock market slump has finally spread from emerging markets to Western-world shares. The flight from risk is benefiting both gold prices and gold demand. The switch in private-investor behaviour says people are suddenly anxious that this correction could flip into a crash.
 
People tend to predict more of what they've just seen, of course. So will this month's rebound in gold prices color the LBMA conference's 2019 outlook?
 
Let's go and find out. Stay tuned to GoldNews for more. Or follow us tweeting live from the LBMA conference @bullionvault
 
Post-conference update, 31 Oct 2018: With gold just recording its first month-on-month gain since March, LBMA Boston forecast (no kidding) a 25.0% rise in gold prices by this time next year.

 

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

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